‘It fell off the back of the Internet': Freight thieves are becoming cybercriminals

Freight trucks have always made a convenient target for thieves. Containers can be pilfered at a roadside rest stop, or a whole truck can disappear while its driver grabs a hot shower. Sometimes truckers are even hijacked at gunpoint.

But a new generation of tech-savvy truck thieves are innovating on old methods.

“One of the M.O.’s that’s on the increase is in a sense identity theft—impersonating another company,” says Nick Erdmann of the security technology firm Transport Security.

The tactic is known as a fictitious pickup. It starts with loadboards—websites like Dat.com and Truckstop.com where shipping brokers list loads in need of delivery. Though the contents of those loads aren’t listed, canny thieves can spot the valuable ones based on certain details: Loads requiring high insurance minimums, loads requiring a team of drivers, or loads coming out of particular locales, such as technology corridors.

Then, using falsified credentials to pose as legitimate truckers, criminals contract to carry the load, drive their own truck to a warehouse or distribution center, and simply pick it up. It can be days before cargo owners even know they’ve been robbed.

The average value of a load lost to a fictitious pickup was more than $140,000 in 2014, and fraud has played a role in much as 10% of all cargo theft in recent years, according to the freight security firm CargoNet.

Impersonating an existing company can be as simple as finding their logo and address on their website. A company’s Department of Transportation-issued Interstate Operating Authority number is also often publicly displayed—and if not, it’s just a phone call away.

Alternately, criminals can use a prepaid credit card to get a new DoT number online through the USDOT’s SAFER portal—thanks to deregulation, applicants are not thoroughly vetted.

Most devious of all, according to Lewis, defunct companies can be revived, along with their DoT number. Because DoT numbers are issued chronologically, an older, lower number is often an indicator of trustworthiness to freight brokers.

The ease of falsifying trucking entities is illustrated by the case of father-and-son heist team Jon and Kyle Dickerson. They operated a string of cover operations over fourteen years, with names including D&T Trucking, Night Line Trucking, and Fish and More. When one company racked up safety violations or otherwise came under suspicion, they just started a new one.

The logistics industry has moved to tackle the problem of fictitious pickups, which declined in 2014 after ticking up steadily since 2005. One part of the solution is enhanced security technology. Many truckloads now contain hidden GPS trackers, a practice pioneered nearly a decade ago by the tobacco industry, according to Erdmann. Tracking units, such as those offered by Lojack SCI, are now no bigger than a cell phone, easily attached to trucks or slipped inside packages.

Other technologies, though, are actually boons to thieves. RFID tagging has been championed by many in the logistics and transportation industry, but Lewis says criminals can use their own RFID readers to identify and target lucrative loads.

While thieves do go after high-value electronics, those are easily traceable. The biggest target, surprisingly, is food, which can be sold back into the supply chain through unscrupulous distributors. “I’ve never seen a serial number on a package of chicken,” says Lewis. “Once you eat it, the evidence is gone.”

The total cost of cargo theft nationwide is hard to measure, mostly because reporting is spotty. Lewis says that law enforcement, insurers, and carriers don’t talk enough. Most states don’t have separate criminal laws covering cargo theft. And of the theft data CargoNet gathers, less than half includes the value of the loss.

Last month, an advertising agency in Panama debuted a ‘tweeting pothole’—a small disc that could be placed in a road defect, and would tweet a maintenance request to the nation’s Department of Public Works whenever it was driven over. The stunt went viral in the U.S., a testament to the global nature of infrastructure frustration—and a hint at the ways technology can help.

According to the Federal Highway Administration, more than one fourth of major urban roads in the U.S. are rated in substandard or poor condition, and over 67,000 bridges are either closed or under use restrictions. Legislative shortsightedness has left federal highway funding subject to a series of stopgap bills that are hamstringing state-level efforts to plan for needed improvements, and even basic maintenance.

Dysfunctional highways cost all Americans, but the trucking industry catches the brunt. “We pay a penalty for rough roads,” says Darrin Roth, vice president of highway policy for the American Trucking Association. Roth says potholes mean higher maintenance costs and lower fuel efficiency, while disruptions like bridge failures and wrecks add to emissions, labor costs, and the chance for accidents.

The ATA found that congestion caused by inadequate or closed roads cost the industry about $9.21 billion in 2013, a 1.4 percent increase in congestion waste over 2012. 141 million hours were lost. That’s the equivalent of 51,000 truck drivers—and their chugging trucks—stuck in traffic for the entire year.

On Main Street, that adds up to about $29 per year in added costs to each American.

The tweeting pothole, in its scaled-down way, suggests tech’s power to help. Providing an early alert, through Twitter or more formal channels, can keep a small fault from becoming a big one, or from causing too much damage or disruption in the meantime.

This is even more important for bridges. In 2007, the I-35W Mississippi River Bridge in the heart of Minneapolis collapsed—a failure the National Transportation Safety Board attributed to a combination of design flaws and excess weight. In addition to killing 13 people, the collapse rerouted about 140,000 daily vehicle trips for more than a year.

When it was rebuilt as the St. Anthony Falls Bridge, the I-35 span was turned into a “smart bridge” using 500 sensors measuring bridge loads, movement, and integrity. The data is monitored for signs of degradation by researchers at the University of Minnesota, in what amounts to a beefed-up version of the tweeting pothole.

Another important gridlock-busting technology is traffic monitoring cameras and high-tech urban traffic centers. The cameras allow much faster clearing of accidents from highways, which according to Roth is one of the most important ways to increase highway shipping efficiency.

Traffic centers also help manage urban traffic flow by timing lights. While these are traditionally manual affairs, the Pittsburgh-based startup Surtrac is demonstrating 25% reduced travel times with its swarmlike approach to ‘smart’ traffic signaling.

Even in the absence of street-level tech, truckers carry potential efficiencies in their pockets—literally. Just like the rest of us, smartphones help truckers plan routes as traffic and driving conditions shift. And trucks go one better, with systems able to plan things like acceleration based on topographic databases.

All that high-tech efficiency might dull the pain as states skip expensive lane expansions and even maintenance. But as Roth points out, a navigation system “doesn’t solve the problem if all the alternative routes are congested.”

Most of the roads we travel on, Roth says, are still rooted in the time of their construction in the 1950s and 1960s, when traffic loads were much lighter. It’ll take Congress, not Google Maps, to give us the highways we need.

Dropoff raises $7 million to take on old-school courier services

Startups are coming up with fresh approaches to nearly every industry, and courier services are no exception.

Austin-based company Dropoff is building a same-day delivery service for businesses, and has been operating in Austin and Houston for the past year. On Monday, the company announced it has raised $7 million in new funding to help it expand to more cities and continue to build out its product.

While very similar to traditional couriers that businesses have been using for years, Dropoff says its selling point is the much better experience it provides thanks to things like down-to-the-minute arrival time estimates, realtime-tracking, and upfront and transparent pricing, among other things. It uses couriers on either bike, car, van, or SUV, based on the delivery.

Dropoff’s customers largely fall into two category of delivery needs: traditional and e-commerce. Some customers use the service for very traditional business courier needs, like delivering documents and machinery parts. Dropoff’s e-commerce clients use the service to deliver their wares, like cupcakes or flowers, to their customers.

For Hey Cupcake, a Texas-based cupcake company, Dropoff has taken over nearly all of its delivery duties, CEO Frank Drew told Fortune. At the first, the company, which has seven stores in Austin but does all its baking in one central location, was using Dropoff for any additional deliveries to its stores, as well as to any customers that its own drivers couldn’t handle. Now it’s turned over all of its deliveries to Dropoff, except for catering jobs. Drew and his team no longer have to worry about predicting how many drivers they need to staff on any given day with unpredictable demand, he says.

“Now I feel like we’re in the cupcake business, not in the delivery business,” he said of his newfound freedom from managing his deliveries.

The delivery service market is certainly getting crowded, with everyone from Postmates to ride-hailing companies like Uber and Sidecar getting into the business. Companies like Amazon have been heating up the logistics space with the e-commerce giant’s popular two-day delivery option and its same-day Amazon Fresh service for grocery items. But Dropoff says it’s different and not worried about other companies because it’s exclusively focused on the needs of businesses, not on servicing consumers as Postmates does, for example. While that sometimes means Dropoff’s couriers make deliveries directly to a client’s customers, it’s only type of delivery the company makes, and it’s not in the business of acquiring consumers as its customers.

For Paul Bricault, who headed Greycroft Partner’s investment in Dropoff in this new round, that enterprise focus is what distinguished Dropoff from others.

With that said, Dropoff is sure to face challenges as it continues to grow. It will have to navigate the unique geography and industries of each new city it expands into, ensure it maintains the quality of its drivers as it increases hires, and handle potential regulation issues that may arise, among many other hurdles.

Spector founded Dropoff with Christian Carollo, Ted Hong, and Jason Klann in late 2013. Greycroft Partners led this latest round, with Correlation Ventures, Texas Atlantic Capital, Wild Basic Investments, and others also participating. The company previously raised $1.85 million in funding.

Gett wants to beat Uber for business accounts. Its strategy? Fixed-price rides

With every dollar that Uber raises—the on-demand car service has amassed nearly $6 billion—it is increasingly surprising to see any company try to take it on.

And yet Gett is doing just that. On Thursday, the Israeli company, which touts its fixed-price black car service as cheaper than Uber’s, will roll out a program in New York City that is designed specifically for businesses and their employees.

The idea? Go after the lucrative travel-and-expense market created by corporate coffers.

Gett launched in 2010 and quickly conquered several European cities before spreading to the United States. Today, both Uber and Gett offer on-demand black car services that passengers can hail and pay for through smartphone apps. But the services differ in key areas. Gett only focuses on black-car service; Uber has introduced various other services, including UberX, a cheaper alternative that competes with taxis, rather than limousines. Uber also controversially employs “surge pricing,” a dynamic model that increases prices with demand; Gett does not do this, and hopes that the move will help it win customers from its larger rival.

The competition for corporate accounts is a more recent battleground. Uber and another rival, Lyft, have already released their own programs designed to help companies and employees better use and manage their car services for work-related trips. In Uber’s case, companies using its program can manage when and where employees can use their allotted rides. Uber automatically bills companies for those rides. Uber has also partnered with popular T&E software providers Concur and Expensify to make it easier for employees to submit rides in expense reports.

Uber’s tremendous popularity among consumers has given it an enormous foothold in the business market. As of March of this year, Uber accounted for 47% of all work-related car rides, according to recent research from online expense management company Certify. In New York City, Uber accounts for 21%—a major improvement from 9% in early 2014.

(Why so low? New York and its army of city taxi cabs is a bit of an outlier compared to most other cities.)

Gett’s corporate program is similar. Employees use its mobile application to hail rides, and Gett provides monthly reports to their employers about those trips. The company says it already serves more than 2,500 companies worldwide, including half of the Fortune 500, though it declined to name any.

Does Gett stand a chance against Uber in becoming the car service of choice for corporations? It’s too early to tell. Though its biggest battle may be in convincing companies that a fixed-price black car is more cost-effective than an Uber of any kind.

Your Valentine’s Day flowers’ journey from farm to vase, in 9 steps

What’s behind that bouquet of roses you receive on Valentine’s Day? Love? Sure. Lust? Maybe. But beyond all that mushy stuff are the practical wheels of business, turning just so to ensure that the flowers you receive are bright, fresh, and—most importantly—on time. 1-800-Flowers gave Fortune a peak at how they manage to deliver 5 million Valentine’s Day roses in the dead of winter.

Why a taxi app with $100 million in funding failed in the U.S.

When Hailo, a mobile application that hails taxi cabs, arrived in New York in early 2013 it was expected to take the country’s largest taxi market by storm, with the rest of the U.S. not far behind. On Tuesday, the startup company said that it plans to pull out of the North American market entirely, laying off 40 employees and citing the “astronomical marketing spend” required to pursue its mission.

The company had A-list investors and strong momentum. Where did the promising e-hail app go wrong?

Two years ago, Hailo’s U.S. launch was highly anticipated. The company had already gained impressive traction in the U.K., with 2.5 million passengers and the promise of a $100 million revenue run rate. An investment from New York’s most prominent venture firm certainly helped: Union Square Ventures led a $30 million investment in Hailo as it arrived in New York. (The round, which followed another for $17 million from Accel Partners, valued Hailo at $140 million before the investment.)

With fresh capital, Hailo opened an office in New York’s SoHo neighborhood and hired dozens of employees, including Tom Barr, the former head of the coffee business at Starbucks SBUX. The timing seemed right. Union Square Ventures’ Hailo investment came right around the time that Uber, GetTaxi, and other similar car-hire mobile services entered a legal battle with New York’s entrenched livery car industry over whether e-hail apps would be legal in the city.

All eyes were on the field of competitors. Hailo and Uber were squaring off for an “epic NYC e-hail throwdown,” declared Liz Gannes of AllThingsD. Six months later—June 2013—e-hailing was legalized in New York. And so the throwdown began.

Hailo’s strategy was to let Uber take the high end of the market, serving customers with luxurious black cars for which Uber would need to recruit new drivers. Hailo would instead take the yellow cab market, infiltrating a network of existing drivers by having them download its app to connect with potential passengers.

It didn’t work. Former employees say Hailo failed to gain traction with New York cab drivers. In the two years it has been operating in New York, Hailo signed up a tiny fraction of the city’s 40,000 yellow taxi drivers. (The company has said it has 60,000 drivers worldwide.) To compare, Uber CEO Travis Kalanick recently said his service adds 50,000 drivers around the world per month. Anecdotally, I was only able to find a Hailo taxi in midtown Manhattan once in six times I opened the app this summer.

Hailo laid off a number of the engineers in its New York office in November 2013. (Jeremy Parker, a senior software engineer at the company, notes on his LinkedIn page that his position was terminated “when Hailo changed course and stopped building a developer team in NYC.”) Co-founder Jay Bregman told Fortune in an email exchange this summer that the company wanted wanted to refocus its engineering efforts in the U.K.

Then in February of this year, Hailo announced that Barr would be promoted to co-CEO alongside Bregman. The announcement was framed as a promotion for Barr, who now handles day-to-day operations. Bregman was said to be working on “skunkworks” projects aimed at redefining its product. In reality, Bregman was demoted. With today’s announcement, Hailo said Bregman would be leaving to start a new project related to robotics.

According to former Hailo employees, the company struggled because what worked in London didn’t translate to New York. London cab drivers are highly trained and equipped with smartphones. There, cabs are a luxury product. Meanwhile, New York’s grid system–far more regimented than London’s cowpaths—makes it easy for new drivers to learn the streets and take the job with very little training. It’s also not standard for yellow cab drivers to have smartphones as part of their job. Many New York drivers were suspicious of a service like Hailo, former employees say. Besides, it’s not difficult for New York drivers to find new fares, leaving Hailo’s value proposition thin.

Further, when e-hailing was approved by New York, the city’s pilot program was delayed because of an appeal from the black car lobby. Uber’s response to legal issues has been to continue operating, as it did when it met resistance in Germany.

Hailo also faced technical issues in New York. Because the city works with payment processors that use outdated technology, Hailo found it difficult to integrate its services with them, according to one former Hailo employee. At the time, Barr said Hailo planned to enter as many as 50 markets by the end of the year. It is currently operating in 20 markets. Meanwhile, Uber has expanded to almost 200 cities and is valued at $18 billion with a war chest of $1.5 billion in venture funding. Lyft is in 60 cities and is valued at $700 million with $332.5 million in investment.

Adoption is soft on the consumer side, too. The app has only cracked the top 1,000 app download rankings for the U.S. one time since it launched, according to App Annie. (By contrast, it has remained in the top 500 in Great Britain, though its standing has fallen slightly this year.) Uber has been in the top 100 in the U.S. for all of 2014. Lyft, which is smaller than Uber but growing quickly, has been in the top 200 for the last six months.

As if that’s not enough, Hailo’s value proposition was directly challenged by market leader Uber when it rolled out its cheaper UberX service, which sometimes undercuts conventional taxi cabs. Uber and Lyft remain engaged in a bitter price war as Hailo struggles.

Finally, Hailo’s one strength—London—weakened after it began charging a minimum fare of £10 during peak hours. (It later backtracked on that move.) The company raised capital on the premise that it could continue its strong early growth, but it has not. Hailo’s revenue in 2013 did not top $100 million.

None of this has stopped Hailo from attracting further investment. This year, the company raised an unannounced round of $50 million in venture funding from OCCAM and a group of Asian investors.

Last month, Hailo hired Gary Bramall, former marketer with Microsoft, Skype, Apple, and Orange, as its new chief marketing officer—based, tellingly, in London. In an interview with Fortune, he downplayed issues in New York, noting that it is his challenge to change Hailo’s image as an also-ran in the taxi wars. New York is a complex market, he conceded, where “even the best tech companies like Airbnb have struggled with legislation.”

Even as Hailo exits the U.S. and Canada—save for Toronto, where Hailo Canada president Justin Raymond seems to have taken a stand against today’s decision—the company still faces stiff competition from Uber, Lyft, and local competitors. Bramall said, elsewhere in the world, Hailo won’t be using the aggressive marketing tactics of Uber and Lyft. “We are aware that aggressive marketing, and bashing and trash talking, has a negative effect on customers,” he said. “We want to be positioned in a way that champions for the user.”

Correction, October 14, 2014: An earlier version of this story misstated that Fred Wilson led the Union Square Ventures investment in Hailo. The deal was led by Partner John Buttrick.

What shipping can tell us about the global economy

The economy is recovering, Right? Look at the latest government data, and it’s not entirely clear.

The Labor Department in September reported disappointing growth in employment, but other surveys for the same period said the labor market was strong. Similarly, GDP declined an alarming 2% in the first quarter, but the report was so full of statistical noise that the market mostly ignored it. In the following quarter it beat estimates, but no one’s exactly sure whether that’s because of genuine economic gains or something else—for example, the weather improved.

Economic forecasting is a fraught process. Numbers lie, signals are mixed, and even the most widely accepted measures of economic health can often be misleading. So are there any metrics out there that can float above the fray? Try shipping.

For years economists have been tracking global maritime trade for information not just on the health of the global economy but on how it’s evolving and where it’s headed. Shipping makes up the lifeblood of global markets. Nearly 90% of goods traded across borders were transported by sea during at least some part of their journey to your shopping cart.

“I see GDP growth as the surface,” says Peter Sand, chief shipping analyst at BIMCO, the world’s largest international shipping association. “Global trade in goods is a vital indicator for gaining insight beyond the surface.”

And what does shipping tell us about the state of the economy today? While there’s not yet overwhelming data, some nascent signals indicate that things could be looking up.

In April the World Trade Organization revised upward its earlier estimates for growth in global trade, pegging it at a 4.7% increase this year. That’s more than double the rate of last year. And in August shipping giant A.P. Moller-Maersk’s stock soared after releasing a standout earnings report. Because Maersk moves such a large portion of global goods, some 15% of all containerized trade, the $58 billion company is seen as a market bellwether. In the second quarter it reported an unexpectedly strong 6.6% increase in container volume.

Containers wait for pickup at the Port of Los Angeles.Photo by Jeffrey Milstein

Container shipping itself is also a particularly telling metric. Because it consists mostly of pricey manufactured goods from developing markets, it’s considered closely linked to actual demand for goods in advanced economies, where most containers end up. Europe imported 8% more containerized cargo from Asia in the first half of 2014 than in the same period of 2013, a figure that belies gloomy reports about the region’s relentless economic doldrums. Meanwhile, throughput at the Port of Los Angeles, the nation’s busiest international trade hub, has increased 7.75% so far this year over the comparable period in 2013. Both signs are encouraging, though economists caution not to read too much into them until the increases prove sustainable over a longer time.

Then there’s the shipping industry’s most famous—or infamous—indicator of all: the Baltic Dry Index. An amalgam of measurements put together by the Baltic Exchange in London, the index tracks the cost of shipping commodities like coal and grain. For years it was a favored barometer for economic shifts—the reason being that as demand rose, prices would do so as well, a fact that would be reflected in the index before it would show up in, say, GDP reports. The Baltic Dry neared a post-crisis low (723) this past July, an order of magnitude below its pre-crisis heights, but since then has registered a sharp gain, increasing to 1,197 in September.

Reason to celebrate? Not exactly. Even in shipping, metrics have their limitations.

Between about 2003 and 2008, the Baltic Dry Index was a beloved metric of Howard Simons, president of Rosewood Trading. Then, he says, the indicator just stopped indicating. Effectively, it was as good as dead. “I took out my shovel and threw some dirt on it,” Simons says. “I’m really sad to see it go. I miss it.”

Though the media still report on its fluctuations, most economists feel that the Baltic Dry has fallen short as a bellwether simply because there are now too many ships—which has hurt the entire shipping industry, too, over the past five years. An oversupply of increasingly giant vessels, most of which came online in 2009 or later after being ordered before the recession, has sunk daily shipping rates. As a result, the low prices don’t necessarily signal global economic distress as much as they do a glut of large ships.

There are other reasons not to trust trade numbers as well. China is importing more raw materials—some of which has less to do with the country’s increasing economic strength than it does with Brazilian mining companies’ aggressive price cutting. By the same token, the drop in U.S. crude imports is probably a reflection of increased domestic oil production (see “American Gusher,”) rather than a slackening demand for energy.

Despite the encouraging initial signs shipping offers, Doug Mavrinac, a managing director at Jefferies, says he’s still waiting on the industry to offer concrete evidence of a comeback. In particular, he’s watching throughputs at ports for longer-lasting gains than have occurred so far. Once imports really start to pick up, he says, that will be a leading indicator, but it hasn’t happened yet. Eventually, maybe as soon as 2016, supply will come back under control too, leading to an increase in prices. And then, just maybe, the Baltic Dry Index will be worth looking at again.

Which company is actually winning? According to data from FutureAdvisor, it’s Uber by a landslide. The investment advisory firm analyzed the car-service spending habits of 3.8 million credit card users in the U.S. over the last year. Of those millions of people, 96,000 used Uber or Lyft. Of those 96,000, the vast majority used Uber.

This shouldn’t come as much of a surprise; Uber had several years’ head start on its rival and, until recently, operated in many more locations. In June 2013, Uber operated in 35 markets, while Lyft counted just 13. Over the last year, Lyft expanded to 60 cities; Uber now lists nearly 200 cities in 45 countries on its website.

Still, the real race is in revenue. Riders spent $26.4 million on 1.2 million Uber rides, compared to just $2.2 million on 170,000 Lyft rides, according to FutureAdvisor. Critically, the average cost per ride was higher for Uber, and the company added new riders faster on average. (At TechCrunch Disrupt, Kalanick said Uber adds 50,000 new drivers each month.)

This doesn’t mean Lyft is toast, of course. FutureAdvisor collected data for the 12 months prior to May 2014 and limited its study to the United States, so it doesn’t paint a full picture. But it’s pretty clear who’s looking at whom in the rearview.

The shortest distance between two points? At UPS, it’s complicated

The number of possible routes that a UPS driver could take on any given day is enormous.

Strike that—the number of possible routes that a UPS driver could take on any given day defies comprehension. That’s not an exaggeration.

A driver for the delivery company typically makes between 120 and 175 “drops” per day. Between any two of those, there are a number of available paths to take. It is, of course, in the best interest of the driver and UPS to find the most efficient route. And that is where things get complicated.

According to UPS, the number to describe the complete set of possibilities in the scenario outlined above, as calculated using combinatorial mathematics, would have 199 digits. The number of possible options would exceed the number of nanoseconds that the Earth has existed.

“It’s huge—unimaginably large,” said Jack Levis, the company’s senior director of process management. “This is as high as you can get in analytics.”

For UPS, it was nothing if not a daunting optimization challenge. But the motivation was powerful: a reduction of just one mile a day per driver would save the company as much as $50 million.

The Atlanta-based company’s answer? A system called Orion, short for On-Road Integrated Optimization and Navigation, named after the hunter in Greek mythology, and a big data analytics effort if there ever was one. Orion—whose algorithm was developed in the early 2000s and piloted through 2009—uses 1,000 pages of code to analyze 200,000 possibilities for each route in real time to deliver the optimal route in about three seconds’ time.

“At first, the mathematicians thought it was going to take about 15 minutes to run,” Levis said. “They were pleased.”

UPS is working to deploy the system to all of its 55,000 North American delivery routes. By the end of 2013—after being applied to just 10,000 routes so far—Orion had already saved 1.5 million gallons of fuel and 14,000 metric tonnes of CO2 emissions. The company expects to complete the rollout by 2017.

There are two “rather inconspicuous” industries that are being disrupted by big data, according to Svetlana Sicular: transportation—which includes a logistics company like UPS—and agriculture.

Sicular, a Gartner analyst, believes that disruption is happening on a broad scale. Consider the commercial shipping industry: the Australian Maritime Safety Authority provides information about port activity in real time so that ships can vary their speed to save fuel and minimize port fees, Sicular said. The authority also uses geofencing—dynamic, location-based digital zones—to trigger and automate those fees, “and this is all transparent through open data,” she said.

It’s not just big data technologies that are causing this transformation, Sicular said. The convergence of mobile devices and cloud computing also play a major role.

“Mobility is important in collecting information and providing live connection to the drivers,” she explained. “Mobility is not just about mobile devices but also about sensors in trucks, planes and ships.”

Feeling pressure to make its operations more efficient, UPS introduced handheld devices for its drivers in the 1990s. “We had to create smartphones and communications online before they existed,” Levis said. In 2008, the company installed GPS tracking equipment on its delivery trucks. Orion is layered on top of this foundation.

Though there’s no easy replacement for a continent-spanning fleet of vehicles—until Amazon’s delivery drones materialize, anyway—the rise of cloud computing has made it easier for startup companies to access the sophisticated technology that only the largest enterprises previously enjoyed. It behooves UPS to stay ahead.

“To me, that’s the future of analytics and big data—not just telling you what has happened, but telling you what should happen and how to correct it in real time,” Levis said. “If a system is so smart that it predicts you’ll have a problem and solves it before it happens, it’s like Sherlock Holmes. It looks clairvoyant, but it’s not.

“It will take a while. But that’s the vision.”

Correction, July 25, 2014: An earlier version of this article misstated the fuel savings of the Orion system. It is 1.5 million gallons, not 1.5.